Formation of segregated and integrated groups

There are many situations where people join groups, the number of groups is fixed, and where a person can only join a new group if the new group approves the person’s joining. We examine such situations where agents are concerned with either local status (each agent wants to be the highest status agent in his group) or global status (each agent wants to join the highest status group that she can join). For both cases, conditions are provided under which a segregated stable partition of groups form where similar people are grouped together and conditions are provided under which an integrated stable partition of groups form where dissimilar people are grouped together. We also show that the addition of an empty group (or location) to a segregated stable partition of groups may cause integration to occur. Department of Economics Southern Illinois University, Carbondale, IL 62901, USA ([email protected])